In the short-term, low oil prices and the weak euro will support economic growth. But the French economy also faces many structural challenges, including a relatively weak competitiveness position, high unemployment and weak public finances.

The strong appreciation following the unpegging of the franc is likely to lead to lower growth. Macro-prudential policies have been tightened somewhat. The government still has to find a way to deal with the outcome of the 2014 anti-immigration referendum.

The German economy performs well on the back of improved domestic demand and a competitive export sector. The public sector is effective in reducing debt. The housing market in the big cities remains buoyant, but is moderating slowly.